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The price of first and second class stamps is to increase by 1p each to 63p and 54p from March 30, the Royal Mail announced today.

A general view of first and second-class stamps. Credit: PA Wire

Sending a large letter will increase by 2p to 95p for first class and by 1p to 74p for second class.

Second-class medium parcels weighing up to 2kg will be priced at £4.89, which Royal Mail said represents a saving of up to £3.11.

The postal group said it had thought "carefully" about the impact on its customers before deciding to raise letter prices, adding that it recognised how the recent tough economic conditions had made it difficult for consumers and businesses.

The man who oversaw the controversial privatisation of Royal Mail will be stepping down later this year, the postal firm has announced.

Royal Mail chairman Donald Brydon is to step down later this year Credit: PA

Chairman Donald Brydon, who has been in the post since 2009, will continue work until at least the annual general meeting in the summer, but a statement from the company revealed the search for his successor had already begun.

I am proud of what Royal Mail has achieved as a company in the last six years.

Our transformation is well underway and we are now a FTSE 100 listed company. I feel that now is the right time for me to make this decision.

Business Secretary Vince Cable has accused the boss of Royal Mail of "scaremongering" in claiming the universal post service is under threat.

Chief executive Moya Greene has warned that the high cost of the service, which ensures a same-price delivery for letters anywhere in the UK, six days a week, is not sustainable in the face of competition in high-density, low-cost areas.

The Business Secretary told ITV News that the major objective of privatisation had been to allow Royal Mail to go out and compete and raise money on the open market for investment, which it had – raising £500 million to date.

But, he said, they were always going to have to compete with e-mail, which was replacing much of its traditional custom, on top of having to compete with other mail carriers.

It comes after Royal Mail chief executive Moya Greene warned that increasing competition in high density, low cost areas was threatening the universal service by making delivering to rural and remote areas not economically viable.

Mr Cable said Royal Mail, now it is only 30 per cent owned by the taxpayer, was free to raise capital privately - and said it had already raised £500 million to invest and compete.

He said the government did not want to see companies "whinging" about having to operate in a competitive market.

Royal Mail bosses today issued a warning that giving people more choice between delivery services was threatening the future of the universal service, which guarantees that letters can be delivered anywhere in the country for the same price.

Royal Mail bosses have warned against allowing 'cherry picking' between competitors Credit: PA

Chief executive Moya Greene told a committee of MPs that the high cost of the universal service obligation – around £7.2 billion a year – was in part because of the difficulties of delivering to rural and remote parts of the country.

Delivering to high-density areas such as the inner city was much lower cost and helped to subsidise these deliveries – but by allowing these customers to “cherry pick”between Royal Mail and their competitors the system was unsustainable.

The Royal Mail has halved the expected growth rate of its UK parcels market to 1-2% due to fierce competition which helped send first-half operating profit down 21%.

Operating profits fell 21%. Credit: PA

The group, sold off by the government in October 2013, said operating profit before transformation costs for the six months to September 28th fell to £279m, with higher pension costs and the absence of a VAT refund received a year ago also hitting numbers.

The figure was at the top end of an analyst forecast range of £237-279m.